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Archive for 'foreign investment/ownership'

Investment Canada Act’s Tradition of Ad-Hockery Continues

I was invited to appear before the House of Commons Industry Committee this week on the subject of Bill C-60, this year’s omnibus budget bill. 18 paragraphs of that long bill describe proposed amendments to the Investment Canada Act, aimed at codifying the policy changes announced by Prime Minister Stephen Harper late last year (in […]

M&A 2012

We knew that the takeover of Nexen by CNOOC was big but I at least didn’t realize how big it was till I saw the Wall Street Journal’s list (Jan.2, 2013) of the 25 biggest M&A deals world-wide in 2012 where it ranked 5th and was the largest deal made by a Chinese company. Canada […]

NYT study on public subsidies in the US

This is a little old, but it was brought to my attention late and it seems to be of durable relevance. Last month, the New York Times (NYT) published an article chronicling public giveaways to corporations in the United States. What is extraordinary is that the article is the result of ten months – 10 […]

Nexen & Progress Takeovers Approved: What Next?

The federal government’s announcement on Friday that it is approving two more big oilsands takeovers (by China’s CNOOC and Malaysia’s Petronas, both state-owned suitors) was political tap-dancing at its best.  Prime Minister Harper’s speech listed several reasons why takeovers by foreign state-owned firms are a problem … but then proceeded to approve $21 billion worth […]

Canadian banks use of tax havens keeps growing

A growing share of Canada’s investment overseas is being channeled by Canadian banks into tax havens. The latest Statistics Canada figures  show 24% of Canadian direct investment overseas in 2011 went to the top twelve tax havens, up from 10% in 1987.   In fact, tax havens of the Barbados, Cayman Islands, Ireland, Luxembourg and Bermuda were […]

Taking Over Nexen

The China National Offshore Oil Corporation’s (CNOOC) bid to acquire Nexen is a large and complex proposal. Canadians should call for a more thorough and transparent review than other foreign takeovers have received under the Investment Canada Act. A preliminary outline of possible costs and benefits follows. The Downside: Chinese Consumer Interests A company like […]

Canada’s Oil: For Sale to the Highest Bidder

Want to know why Canada’s currency is sky-high despite our sluggish recovery, our large and persistent current account deficit, and our lousy export performance? Check out this fascinating story in Friday’s National Post, by Yadullah Hussain, on why Canada’s oil reserves are such a uniquely hot commodity in the eyes of global oil corporations. The […]

Caterpillar and the Investment Canada Act

There’s been some good public debate about the need for changes to the Investment Canada process in light of Caterpillar’s incredible actions in London.  They showed up uninvited in 2010, took over a long-standing productive profitable plant, demanded money (from workers and government alike), then left — leaving behind a shuttered plant and a shattered […]

Foreign influence in Canada’s oil patch

Natural Resources Minister Joe Oliver’s contention that the National Energy Board hearings on the Enbridge Northern Gateway pipeline are loaded down with foreign special interests is exactly right. But it is not the “environmentalists and other radical groups” that are the problem. It’s the oil and gas industry. This Statscan table lays out foreign ownership in […]

What Newfoundland & Labrador Can Teach the Rest of Canada About 21st Century Globalization

A shorter version of this analysis appears at the Globe and Mail’s Economy Lab. See article and comments here. Last fall Premier Danny Williams wondered what could drive anyone to let hundreds of millions of dollars slip through their fingers. Last week he got his answer. The Roil report on the 18-month strike at Voisey’s […]

What To Do About Foreign Ownership?

Here is the CLC brief to the Industry Committee hearings which we did not get to present due to the election. Hopefully the issue will still get a good hearing over the next few weeks, especially since the NDP have staked out some good ground on the issue. I note there have been 48 posts […]

The LSE-TMX Deal

I have no informed view on the merits or downsides of this proposed takeover of the Toronto exchange, but find it interesting the degree to which the Canadian corporate and political elites have again  fractured on the issue of foreign ownership of “strategic” assets.  This is an interesting piece from the Financial Times of London.  […]

Taxing Multinational Corporations

Earlier this month, I attended a very interesting conference on the taxation of multinational corporations. It included a case study of how SABMiller avoids paying tax in Africa. While many of the points presented are undoubtedly familiar to this blog’s readers, the conference put it all together with a clarity that I attempt to reproduce […]

The Ins and Outs of Foreign Investment

To provide a little context for our current national debate on foreign investment, I did a little digging recently in the FDI data. Some of my findings surprised me.  Yes, Canada exports slightly more FDI capital than we import (that is, the net investment position in FDI is slightly positive).  But most of what we […]

Potash and the Renaissance of Economic Nationalism

Who would have thought it. More than twenty years after the Canada-US FTA all but buried the economic nationalist legacy of the Trudeau era, a major foreign take-over seems to have been blocked. That’s twice under the Conservatives, after years of Liberal rubber stamping of foreign acquisitions under the Investment Canada Act. This is certainly […]

The Conference Board on Potash Royalties

A week ago, the Government of Saskatchewan released the Conference Board of Canada’s report on the possible Potash Corporation of Saskatchewan (PCS) takeover. It provides 77 pages of useful information, but is disappointingly thin on policy recommendations. The Conference Board downplays concerns about BHP leaving Canpotex after acquiring PCS. It argues that, with or without […]

Finance Capital Turns Parasitic

In an announcement that largely went unnoticed last week, U.S. Steel said it plans to close down the blast furnace at Stelco’s Hilton Works in Hamilton, Ontario. Hilton Works was once the main steelmaking operation of what was once Canada’s largest integrated steelmaker. Its demise exposes how Stelco has been reduced to a mere shell […]

Ottawa Lends Vale a Billion

So, Export Development Canada (EDC) has agreed to lend Vale up to $1 billion US. This announcement comes on the heels of a bitter labour dispute at Vale’s Sudbury mines and in the midst of an ongoing strike at its Voisey’s Bay operations. The financial rationale is unclear. Although $1 billion is very large for […]

Capitalism vs State Capitalism and Potash

The Government of Saskatchewan wants nothing to do with a state (read China) corporation takeover of Potash Corp.  The Globe reports: “The Saskatchewan government signalled Wednesday that it is unlikely to support a takeover of the Saskatoon-based company by a sovereign wealth fund or other state-owned firm from China or other large potash-buying nation. The […]

Steelworkers on the Potash Takeover

Last week, I was in Halifax at USW’s Ontario-Atlantic district conference. It was a great conference in a great city. But having so many key people out of the office limited our response to BHP Billiton’s bid for the Potash Corporation of Saskatchewan. (Next time BHP launches a hostile takeover, it should better coordinate the […]

Vale’s Striking First Quarter

Vale, the company against which my union has been on strike since July 2009, released its first-quarter earnings this evening. The release deflates Vale’s rationale for demanding labour concessions and confirms that the strike is hurting its bottom line. The company wants to eliminate defined-benefit pensions for new employees and drastically reduce the bonus paid […]

Foreign Control of Canadian Mining

This morning, Statistics Canada released Corporations Returns Act data for 2007: Foreign acquisitions of Canadian-controlled firms, particularly in manufacturing and oil and gas, drove a 10.6% increase in Canadian assets under foreign control in 2007. Canadian assets under Canadian control rose 9.9%, led by the depository credit intermediation industry. As a result of these movements, […]

Vale’s Striking Fourth Quarter

Vale, the company against which my union has been on strike since July of last year, released its fourth-quarter earnings this evening. This release deflates the company’s rationale for demanding labour concessions and confirms that the strike is hurting its bottom line. Vale wants to eliminate defined-benefit pensions for new employees and drastically reduce the […]

Vale’s Striking Third Quarter

Vale, the company against which my union has been on strike since July, presented its third-quarter earnings this morning. These figures confirm that Vale does not need the concessions it has been demanding and that the strike is costing it significantly. The company wants to eliminate defined-benefit pensions for new employees and drastically reduce the […]

Trading on Insider Political Information

There are some really wonderful new young economists out of Canada. I just had to let folks know of a fabulous study “Coups, Corporations and Classified Information”(find it via this list) done by one of them: Suresh Naidu (one of our own) and his colleagues Arindrajit Dube and Ethan Kaplan. (In the interest of full […]

More Clement on US Steel

To my surprise, the Harper Conservatives seem to again be breaking new ground in enforcing the Investment Canada Act. This afternoon, the Industry Minister announced that he is taking US Steel to court for violating its commitments. Back in May, my union argued that the federal government must be prepared to take US Steel to […]

National Development Banks

The credit crisis, which sharply increased private borrowing costs but reduced government borrowing costs, highlights the potential advantage of having a public agency to finance economic development. The front page of today’s Regina Leader-Post features a report on my union’s letter (full text below) to the Government of Canada about Evraz using its Canadian facilities as collateral to […]

Clement on US Steel

A year ago, the Harper Conservatives blocked a proposed foreign takeover under the Investment Canada Act for the first time ever. Today, they announced an effort to hold US Steel to commitments it made under the Act in taking over Stelco. Here is what I said to the Business News Network, Canadian Press and The Financial Post. […]

Current Account: 2008 vs. 1999

Initial reports of this morning’s current account deficit emphasize that the fourth quarter of 2008 was the first such deficit since the second quarter of 1999. While correct, this historical comparison overlooks a crucial difference. Canada’s balance of investment income has always been negative. In the second quarter of 1999 and most previous quarters, Canada’s trade […]

Danny Chavez vs. NAFTA

I have generally been underwhelmed by media coverage of AbitibiBowater’s prospective NAFTA challenge of Newfoundland and Labrador’s decision to reclaim natural resources that the company previously used to operate paper mills in the province. I watched a panel discussion on Mike Duffy Live (before his Senate appointment) that focussed entirely on NAFTA’s nondiscrimination provisions. But […]